Alarum Technologies Ltd.

Alarum Technologies Ltd. is a global Software as a Service (SaaS) provider specializing in web data collection solutions, which empower organizations to collect, extract, and analyze large-scale structured data from public online sources. The company's core offerings include secured, fast, and anonymous Internet Protocol Proxy Network (IPPN) solutions, as well as various data collection products. These solutions enable business customers to browse the internet anonymously and securely, and to collect vast amounts of accurate, transparent web data by connecting from different IP addresses. Alarum's IP pool contains millions of IPs, including internet service provider (ISP) IPs, data center IPs, and residential service provider IPs. The company also offers tools for collecting real-time structured data from global search engines and websites with anti-bot technologies, and sells pre-collected structured data as datasets. In July 2023, Alarum scaled down its consumer internet access business, CyberKick Ltd., to focus on profitable revenue generation, maintaining service only for existing paying users with minimal costs.

The company's competitive positioning is characterized by intense competition from Software as a Service (SaaS) data collection vendors, some of which are larger and better known, such as Bright Data Ltd., Oxylabs Networks Pvt. Ltd., and BiScience Inc. Alarum highlights its main advantages as NetNut's web data collection service's capacity to process hundreds of terabytes per second ³⁰ while ensuring data collection is not blocked, offering the widest set of IP options, direct connections to top ISPs globally for fast and reliable geo-targeted web data access, strategic partnerships with leading ISPs and technology providers, and rigorously tested solutions that outperform competitors in speed, security, success rates, and reliability. NetNut's web unblocker also delivers consistently higher success rates against anti-bot systems due to adaptive technology.

Alarum's core business model revolves around generating SaaS revenue primarily from subscription fees and usage-based fees for its IPPN and data collection solutions. Subscription-based contracts are typically yearly or monthly, with a fixed price for a pre-defined data volume or speed, and revenue is recognized on a straight-line basis over the contract term. Usage-based contracts are charged at a fixed unit price based on actual consumption or data speed, with revenue recognized as consumption occurs. Starting in 2025, the company also generates revenue from the sale of ready-to-use datasets, recognized at the point of data transfer to the customer. The primary customer segments include advertising and media companies, financial organizations, cybersecurity companies, industrial and commercial companies, online companies, education institutions, and the AI recruitment market. These customers use Alarum's platform for competitive pricing analysis, ad verification, SEO validation, web data extraction, and brand monitoring.

The company offers several distinct product and service lines. Its IPPN solutions include Static residential proxy network, Rotating residential proxy network, Data center proxy network, Premium dedicated static residential proxies, and Mobile proxies. These proxy networks are built on proprietary technology, including unique carrier-grade routing and patented reflection technology (U.S. patent number 11,818,104 ³¹), providing anonymous, fast, and secure internet access through millions of global endpoints. The data collection solutions include a Search Engine Results Page (SERP) data collection service, which delivers real-time structured data from global search engines for use cases like AI model training, SEO tracking, and competitive intelligence. A Social data collection service is designed to collect and process publicly available social data. The Website Unblocker tool enables customers to collect public web data from websites protected by anti-bot technologies, leveraging a strategic decision tree and multi-step fallback workflow. Scraping APIs integrate proxy and website-unblocking technologies for automated retrieval of structured data. Lastly, Datasets are structured, ready-to-use collections of organized and cleaned data from various online sources, sold to customers for analysis, AI model training, and market trend tracking.

For the fiscal year ended December 31, 2025, Alarum reported total revenues of $40.7 million ¹⁰, an increase of 28% from $31.8 million ¹¹ in 2024. Cost of revenues significantly increased by $9.0 million ¹³, or 114%, to $16.9 million ¹² from $7.9 million ¹⁴ in 2024. This led to a slight decrease in gross profit by $0.1 million ¹⁵, or 0.3%, to $23.8 million ¹⁶ from $23.9 million ¹⁷ in 2024. The gross profit margin for 2025 was 58% ¹⁸, down from 75% ¹⁹ in 2024. Operating expenses totaled $23.6 million ²⁰ in 2025, up from $17.2 million ²¹ in 2024. Research and development expenses increased by $3.0 million ²², or 67%, to $7.5 million ²³ from $4.5 million ²⁴. Sales and marketing expenses rose by $2.1 million ²⁵, or 30%, to $9.1 million ²⁶ from $7.0 million ²⁷. General and administrative expenses increased by $1.3 million ²⁸, or 23%, to $7.0 million ²⁹ from $5.7 million. Operating profit for 2025 was $0.2 million ³², a substantial decrease from $6.7 million ³³ in 2024. Net financial income increased to $1.3 million ³⁴ in 2025 from $0.3 million ³⁵ in 2024. Tax expense decreased to $0.5 million ³⁶ from $1.2 million ³⁷. Net profit for the year was $1.0 million ³⁸, a significant reduction from $5.8 million ³⁹ in 2024. Basic and diluted EPS for continuing operations were both $0.01 ⁴⁰ in 2025, down from $0.09 ⁴¹ and $0.08 ⁴² respectively in 2024. Net cash used in operating activities was $2.0 million ⁴³ in 2025, a decrease of $10.9 million ⁴⁴ from $8.9 million ⁴⁵ provided in 2024. Cash and cash equivalents stood at $12.3 million ⁴⁶ as of December 31, 2025, down from $15.1 million ⁴⁷ at the end of 2024. Total debt is not explicitly stated as a single figure, but current maturities of long-term loans were $0 ⁴⁸ and long-term loans, net of current maturities, were $0 ⁴⁹ as of December 31, 2025, indicating full repayment of the strategic funding loan.

The year-over-year comparison for 2025 shows a significant shift in revenue composition and profitability. Total revenues increased by 28% ¹⁰, primarily driven by strong demand from a large-scale customer building foundational AI models and increased sales of new products. Data collection solutions and data sets combined generated $11.1 million ⁵⁰ in revenues in 2025, a substantial increase from $0.6 million ⁵¹ in 2024. This growth was partially offset by a $1.1 million ⁵² decrease in IPPN solutions revenues and a $0.5 million ⁵³ decrease in other revenues due to the scaling down of CyberKick operations. Gross profit margin contracted significantly from 75% ¹⁹ in 2024 to 58% ¹⁸ in 2025, mainly due to a 114% ¹³ increase in cost of revenues, driven by higher network and server costs and subcontractor services to meet increased demand for traffic. Operating profit declined sharply from $6.7 million ³³ in 2024 to $0.2 million ³² in 2025, reflecting increased investments in research and development (up 67% ²²), sales and marketing (up 30% ²⁵), and general and administrative expenses (up 23% ²⁸). Net profit decreased from $5.8 million ³⁹ in 2024 to $1.0 million ³⁸ in 2025.

During the reported period, Alarum made significant operational developments. The company decided in July 2023 to scale down its consumer internet access business, CyberKick Ltd., which resulted in material reductions of expenses and headcount, and continues to serve only current paying users. The company completed the sale of its legacy cybersecurity solutions in July 2023, rendering its subsidiary Safe-T Data A.R Ltd. inactive. Alarum made the final payments of its strategic funding loan with O.R.B. Spring Ltd. in October 2025, totaling approximately $2.7 million ⁵⁴, of which $1.6 million ⁵⁵ was in cash and $1.1 million ⁵⁶ in company shares, with no remaining balance as of December 31, 2025. The company also filed a shelf Registration Statement on Form F-3 on November 25, 2024, which became effective on November 29, 2024, allowing it to offer and sell up to $100 million ⁵⁷ of ADSs.

Alarum Technologies Ltd. expects its current cash and cash equivalents of approximately $12.3 million ⁴⁶ and high-rated long-term debt investments of approximately $10.2 million ⁵⁸, totaling approximately $22.5 million ⁵⁹, to be sufficient to meet its anticipated cash needs for the foreseeable future and at least for the next 12 months. The company's operating plans are subject to change based on various factors, including growth rate, spending on development, sales and marketing expansion, new product introductions, market acceptance, and strategic acquisitions.

A major growth area for Alarum is leveraging its existing IPPN Solutions and service offerings to enter the broader Automated Data Collection & Labeling (ADCL) Market, which is projected to reach more than $17.1 billion ⁶⁰ by 2030, according to Grand View Research. The company believes its unique IPPN architecture, including patented reflection technology, website unblocking technology, network flexibility and scalability, effective IP rotation, and experience in ethical data collection, positions it well for this expansion. Key drivers for this growth include enterprise customers seeking full end-to-end solutions, the increasing importance of real-time data for decision-making, the growing use of AI-based data optimization for model training, and the increasing use of complex digital marketing requiring efficient automated data collection. The company plans to offer a complete ADCL Service Package, including a Data Communication System (DCS), a Data Set Library (DSL), and DSL Insight and Analysis services, along with automated workflows.

Another growth vector involves expanding its revenue base through cross-selling the ADCL service package to existing IPPN customers and upsizing existing IPPN service packages as customers migrate to the ADCL offering. The company also aims to achieve rapid market traction in the ADCL market with small and medium enterprises. A significant part of the strategy is to improve overall margin growth through the re-sale of "off-the-shelf" DSL solutions, which, once created for one client, can be re-sold at diminishing marginal costs. The company has invested heavily in expanding its offerings to become a leading provider in the web data collection market, focusing on providing a wide selection of web data collection service types to address diverse customer use cases.

Operationally, Alarum expects research and development expenses to continue to increase in absolute dollars as it invests in enhancing product capabilities, addressing new threat vectors, and accessing new customer markets. Sales and marketing expenses are also expected to increase in absolute dollars as the company expands its sales and marketing activities and international operations. The company anticipates that these investments in business growth may lead to increased costs and could impact short and mid-term operating and net profit margins.

Regarding capital allocation, Alarum's capital expenditures for 2025 amounted to $143,000 ⁶¹, primarily for purchases of fixed assets such as leasehold improvements, computers, and equipment for product development, financed mainly from cash on hand. The company has a shelf Registration Statement on Form F-3, effective November 29, 2024, allowing it to offer and sell up to $100 million ⁵⁷ of ADSs from time to time. The company has never declared or paid cash dividends on its Ordinary Shares and does not anticipate doing so in the foreseeable future.

Management has explicitly flagged several structural headwinds and execution risks to its growth plan. These include the challenge of selling additional solutions and products to existing customers and acquiring new ones, the risk of a material effect on operating margins and profitability from the loss or reduction in sales to a significant customer (top 6 customers accounted for approximately 49% ⁶² of 2025 revenue), and potential reductions in customer consumption due to technological, regulatory, market, or business changes. The company also faces intense competition from data collection vendors, some of which are larger and better known, and the emergence of smaller competitors leading to pricing pressure and potential declines in revenues and margins. The rapid evolution of the data collection markets and the need to constantly adapt solutions to new technologies and challenges pose a risk if the industry does not develop as anticipated.

Geographic, regulatory, and macro factors identified as constraints include political, economic, and military instability in Israel and the surrounding region, such as the Israel-Hamas, Israel-Iran, and Israel-Hezbollah conflicts, which could adversely affect operations, product development, and results. The company's headquarters, management, production facilities, and employees are primarily located in Israel. Mandatory military service requirements or emergency call-ups affecting Israeli employees could disrupt operations. Furthermore, international regulatory bodies are increasingly focused on online privacy and user data protection, with laws like GDPR in the EU and UK, and various state privacy laws in the U.S. (e.g., CCPA/CPRA), imposing complex compliance obligations. Regulatory or judicial developments, including intensified efforts by large online platforms to restrict scraping, could limit or restrict automated data collection, impose licensing or notice requirements, or affect the feasibility of certain data-driven solutions. The company is also exposed to fluctuations in currency exchange rates, particularly the NIS/U.S. dollar, as a material portion of its operating expenses are incurred in NIS.

Alarum Technologies faces material risks including intense competition from larger and more established data collection vendors, which could lead to pricing pressure and declining margins. The company's reliance on a limited number of key customers, with the top 6 customers accounting for approximately 49% ⁶² of 2025 revenue, poses a significant risk if these customers reduce consumption or are lost. Rapidly evolving regulatory landscapes concerning data privacy (e.g., GDPR, CCPA/CPRA) and web data collection practices, including anti-bot technologies and legal challenges to scraping by major platforms, could limit the functionality of its solutions or increase compliance costs. Geopolitical instability in Israel and the Middle East, where the company's operations are concentrated, including the Israel-Hamas, Israel-Iran, and Israel-Hezbollah conflicts, presents risks of operational disruption, employee mobilization, and adverse economic conditions. Cybersecurity threats, as evidenced by an immaterial breach in January 2023, could harm public perception and lead to financial losses or operational impairment if internal network systems are compromised or hosting infrastructure fails. Fluctuations in foreign currency exchange rates, particularly the NIS against the U.S. dollar, could negatively affect financial results given that a material portion of operating expenses are incurred in NIS. The company's ability to manage growth, successfully develop and market new products, and retain skilled personnel are also critical, with a failure in these areas potentially harming future revenues and operating results.

Management's overall tone emphasizes a strategic pivot towards the high-growth Automated Data Collection & Labeling (ADCL) Market, leveraging existing strengths in IPPN solutions. They highlight the decision in July 2023 to scale down the consumer internet access business to focus on profitable revenue generation, indicating a commitment to efficiency and higher returns. Management explicitly states their belief that the company's unique IPPN architecture, including patented reflection technology and website unblocking capabilities, positions them to become a market leader in the ADCL Market, which is projected to reach more than $17.1 billion ⁶⁰ by 2030. Key strategic priorities include upsizing IPPN Solutions packages to existing customers, cross-selling the ADCL service package to existing customers, achieving rapid market traction in the ADCL market with small and medium enterprises, and improving margin growth through the re-sale of "off-the-shelf" DSL solutions. They acknowledge the need for continued investment in research and development and sales and marketing, which may impact short and mid-term operating and net profit margins. Management also notes that as of December 31, 2025, their cash and cash equivalents and high-rated long-term debt investments totaled approximately $22.5 million ⁵⁹, which they expect to be sufficient for anticipated cash needs for at least the next 12 months.